Gerdau Announces Q3 Results

Release time：Nov 01, 2019 From：admin

Gerdau SA announced its results for the third quarter of 2019. Adjusted EBITDA of BRL 1,457 million with margin of 14.7% in 3Q19, excluding mainly the effects from the scheduled shutdown of Blast Furnace 1 at the Ouro Branco Mill in the Brazil BD. In 3Q19, crude steel production decreased in relation to 3Q18, mainly due to the lower production volume at the North America Business Division, given the divestment of most of the rebar operations in the United States. The production decrease also was influenced by the scheduled maintenance shutdown of Blast Furnace 1 at the Ouro Branco Mill in the Brazil BD. Steel shipments declined in the period, reflecting the divestments in the North America BD and the lower shipments in the Special Steel BD.

Comparing the 9 months of 2019 to the 9 months of 2018, a sharp decline in crude steel production and steel shipments was due to the asset divestment in North America BD (wire-rod operation and most of the rebar operations), South America BD (Chile operation)and Special Steel BDOndia operation).

Operating resultThe reduction in net sales and consolidated costs of goods sold in 3Q19 in relation to 3Q18 is mainly due to the lower shipments.

Consolidated gross profit and gross margin decreased in 3Q19 in relation to 3Q18, due to the divestments in the North America BD, the higher costs in the Brazil BD with the scheduled shutdown of Blast Furnace 1 at the Ouro Branco Mill and the higher cost per tonne sold in the Special Steel BD.

Selling, general and administrative expenses in 3Q19 decreased in relation to 3Q18, reflecting the ongoing operating efficiency gains and the digital innovation initiatives, as well as the divestments. Meanwhile, as a ratio of net sales, selling, general and administrative expenses increased, to 3.7%, reflecting the lower net sales in the period.